Mpact, a paper and plastics packaging maker spun off from Mondi in 2011, continues to struggle in poor trading conditions. But the group has spent substantially on upgrading plant and machinery in the past four years and expects to soon see the benefits on the bottom line. About R765m has gone on a 35% capacity increase at its Felixton paper mill in KwaZulu-Natal. Another R150m has been spent on doubling capacity at a corrugated packaging facility in Port Elizabeth. "We hope we are close to the bottom of the business cycle of high investment costs and low returns," CEO Bruce Strong said on Tuesday. While the group increased revenue by 3.1% to R4.8bn in the six months to June 2017, underlying operating profit of R169m was 47.4% down on the June 2016 profit of R322m. The group’s return on capital employed of 10.6% in the period was substantially down on the 16.7% return in June 2016. According to Avior Capital Markets, Mpact’s total capital expenditure has been about R2.7bn in the fou...
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